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Yesterday, I took a look at five biotechnology stocks whose pipeline and sales potential failed to impress me. Today, I intend to reverse that role and point out five biotech companies on my radar that show minimal downside risk and could be an approval away from rocketing higher.

As Brian Orelli has pointed out, risk is always relative, and these five biotech stocks appear to be well worth the risk.

Arena Pharmaceuticals (NAS: ARNA) The battle for the anti-obesity market between Arena's Belviq and VIVUS' Qsymia has been going on for years, but only recently did I come to the determination that Arena's Belviq is better positioned for growth than VIVUS' Qsymia.

The key point is that Belviq chose to partner up with Eisai, which is handling the costs associated with Belviq's additional safety trials. Although Arena will give up some of its profit potential with this partnership, it gains access to Eisai's skilled marketing department, which should help push Belviq sales rapidly past Qsymia, even if Qsymia beats Belviq to market. Safety concerns associated with Belviq are also significantly less worrisome than those associated with Belviq, which could be a turning point in getting physicians to prescribe the drug.

There isn't much in Arena's pipeline beyond Belviq, but it appears likely that it has a blockbuster drug on its hands that has a decent shot at being approved in Europe (where Qsymia is likely to fail), and a good shot at outdueling Qsymia in the U.S.

Aeterna Zentaris (NAS: AEZS) Aeterna Zentaris was whacked in early April, losing three-quarters of its value, after it and development partner Keryx Biopharmaceuticals reported that its metastatic colorectal cancer drug, perifosine, failed to meet its endpoint in late-stage clinical trials. Many investors wrote off Aeterna Zentaris as that point, especially considering its expected cash burn over the coming months.

As for me, I'd point to the remaining seven clinical trials and its four preclinical studies as reason to jump on board the bandwagon. In 2013, we'll get data from a late-stage trial of perifosine to treat multiple myeloma. Keep in mind that just because perifosine failed in one trial doesn't mean it will fail in treating a separate type of cancer. The company will be applying for a new drug application for AEZS-130, its adult human growth hormone deficiency diagnostic in the first half of 2013, and will be applying for a special protocol assessment for AEZS-108, its endometrial cancer candidate, within the next few weeks. In total, we're looking at four mid-stage trials, two late-stage trials, and an FDA-approved in vitro fertilization test (Cetrotide) that's already on the market. That looks like ample opportunity to me.

Incyte (NAS: INCY) Keeping with theme of oncology-focused biotechnology companies, Incyte presents investors an intriguing value with FDA approval of myelofibrosis drug Jakafi in the U.S., and EU approval in Europe within the past year. Although targeted at a small pool of high-risk MF patients, Jafaki hits a previously unmet need in MF treatments.

But, it's actually Incyte's remaining pipeline of JAK1 and JAK 2 inhibitors that has me excited. Incyte currently has one late-stage clinical trial ongoing for polycythemia vera -- a rare blood cancer -- five oncology and three inflammation mid-stage clinical trials, and one additional oncology early stage trial. Its JAK inhibitors have proven very effective in clinical studies thus far (which doesn't necessarily translate well to other types of cancer treatments), and it's partnered up with the highly experienced marketing team of Eli Lilly and Novartis in various development aspects. In addition, its focus on unmet needs will allot Incyte a good amount of pricing power which should rapidly help it recoup R&D costs.

Jazz Pharmaceuticals (NAS: JAZZ) Jazz Pharmaceuticals has already had an incredible run higher and is bordering on becoming a well-oiled pharmaceutical machine, but I feel the run is still just beginning.

Jazz's lead drug, Xyrem, which is used to treat narcolepsy, saw sales jump higher by 59% in its most recent quarter. On top of organically boosting sales of Xyrem, it's made strategically genius buyouts of both EUSA Pharma and Azur Pharma, which have been immediately accretive to earnings and boosted its balance sheet. Jazz's product lineup now includes a pleasant mix of oncology, psychiatry, and pain drugs. It's also in the process of selling its women's health business for $95 million to specialty pharmaceutical company Meda.

Don't think for a moment, though, that Jazz is done innovating. It's currently working on additional oncological indications for Erwinaze, its FDA-approved treatment for acute lymphoblastic leukemia, and Leukotac (gained from its purchase of EUSA Pharma), which is in late-stage trials in Europe for the treatment of steroid-refractory acute graft-versus-host-disease. Considering Jazz's consistent history of earnings beats, this looks like the next pharmaceutical giant in the making.

Astex Pharmaceuticals (NAS: ASTX) Astex Pharmaceuticals had a particularly rough Friday after announcing it was discontinuing its phase 2 study of amuvatinib following statistically uninspiring response rates. Yet, Astex shareholders can relish the fact that it still has nine clinical trials under way, even without amuvatinib, and an FDA-approved injectable drug, Dacogen, to treat myelodysplastic syndrome.

Astex's pipeline is deep, with one late-stage clinical trial, four mid-stage clinical trials, and four early stage clinical trials ongoing, and multiple preclinical and discovery-stage studies. In addition to having multiple ongoing trials, Astex has multiple development partners, including two drug hopefuls partnered with Novartis, one drug hopeful partnered with AstraZeneca, multiple drug study partnerships with Johnson & Johnson subsidiary Janssen Pharmaceuticals, and multiple discovery-stage partnerships with GlaxoSmithKline. To add the icing on the cake, Astex boasts an incredibly healthy cash balance of $119.3 million with absolutely no debt.

Foolish roundupEvaluating a biotech company definitely isn't as easy as going from point A to point B with your average non-health-care company. However, these five biotechnology stocks all possess a deep pipeline, premier partnerships, or distinct advantages over their peers that allows me to feel comfortable in proclaiming them low risk, high reward stocks. At the moment, Arena Pharmaceuticals is the only biotech listed here currently lacking a CAPScall of outperform in my CAPS portfolio; that changes right now!

What's your pick for the biotech sectors lowest risk, highest reward stock? Share it with the community in the comments section below.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of, and creating a diagonal call position in, Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.